What is the auditor's responsibility regarding internal controls during the audit of Checkersrallys' financial statements?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
In performing an audit in accordance with GAAS, we:
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
According to Checkersrallys' 2025 Franchise Disclosure Document, when performing an audit, the auditor obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate for the circumstances. However, this understanding is not for the purpose of expressing an opinion on the effectiveness of Checkersrallys' internal control, and the auditor does not express such an opinion.
In other words, the auditor reviews Checkersrallys' internal controls to the extent necessary to plan the audit procedures, but the audit is not designed to provide assurance on the quality or effectiveness of those internal controls. The auditor's primary goal is to assess the risk of material misstatement in the financial statements, whether due to fraud or error.
The auditor's responsibilities also include communicating with those charged with governance regarding the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters identified during the audit. This communication ensures that relevant parties are informed of any significant issues discovered during the audit process.